Reduce Voltas, target price Rs 795: Centrum Broking

Centrum Broking has reduce call on Voltas with a target price of Rs 795. The current market price of Voltas is Rs 793.9.

Voltas, incorporated in the year 1954, is a Large Cap company (having a market cap of Rs 26257.36 Crore) operating in Consumer Durables sector.

Voltas key Products/Revenue Segments include Electrical Goods, Contract Revenue, Sale of services, Other Operating Revenue and Scrap for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 3003.46 Crore, up 47.50 % from last quarter Total Income of Rs 2036.27 Crore and up 11.08 % from last year same quarter Total Income of Rs 2703.78 Crore. Company has reported net profit after tax of Rs 171.40 Crore in latest quarter.

The company’s top management includes Mr.Noel N Tata, Mr.Zubin S Dubash, Mr.Arun Kumar Adhikari, Ms.Anjali Bansal, Mr.Bahram N Vakil, Mr.Hemant Bhargava, Mr.D Sarangi, Mr.V Deshpande, Mr.Pradeep Bakshi, Mr.Saurabh Agrawal. Company has S R B C & Co. LLP as its auditors. As on 31-03-2023, the company has a total of 33 Crore shares outstanding.

Investment Rationale
The company's market share loss over the past two years is largely attributable to aggressive pricing by some peers, which also restricted VOLT from taking price hikes in Q4FY23. The brokerage believes that heightened competitive intensity will restrict EBIT margin for the entire industry to single digits over the next 2-3 years, while VOLT may continue to lose market share further. The brokerage has cut its FY24E/FY25E EPS estimates by 3%/4%. Maintain REDUCE rating on the stock with revised SoTP target of Rs795 (Rs800 earlier) based on FY25E earnings.



Promoter/FII Holdings
Promoters held 30.3 per cent stake in the company as of 31-Mar-2023, while FIIs owned 20.58 per cent, DIIs 32.69 per cent.